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No. of Recommendations: 2
Interview with Howard Capek from UBS Warburg in the WST. Mr. Capek: "So in the rehab and outpatient surgery market, which is roughly $22-$23 billion sector growing somewhere between 5% and 7% per year, we like HEALTHSOUTH Corporation (NYSE:HRC) HEALTHSOUTH is our top pick for 2001. It is rated a Strong Buy, trading at $15 today. Within a year, fairly valued, we believe it is a $24 to $25 stock." Further into the article Capek states, "HEALTHSOUTH right now trading at only 8 times our 2001 EBITDA, versus the broader hospital peer group multiple of 9.8 times.
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Two other long-term kickers to the story on HEALTHSOUTH are based on government reimbursement changes and occupancy leverage. Right now, we believe the company can earn $0.83 in EPS in 2001 up from $0.71 that they should earn in 2000. There could be $0.15 to &0.25 per share upside to our EPS forecast in 2002, with some of that starting in late 2001".
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